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Comment by Shank | Hacker News Reader

This is just like the SEC "not enforcing" securities clauses until they have evidence. I think the writing is on the wall for not just Tornado Cash, but any system that functions like it: if you don't have an AML system that works, and your system is used for anything the government can prove would've been stopped by AML and should have been stopped by AML, it is incompatible, in principle, with the US dollar.

Just because Tornado Cash and other mixers survived for this long doesn't mean that the law suddenly changed or anything. All it means is that there was enough evidence collected to justify OFAC/SDN sanctioning. Then, the dominoes fell.

Tornado Cash was /never/ okay, but the government waited patiently for the evidence and acted when it had it. The same thing should be assumed to be true for /all/ systems in this sphere. The US dollar is the world reserve currency, and the SDN list is a death sentence for any project or system if that system has outputs to US dollars anywhere in the chain. All electronic cash transfer systems should be assumed to be incompatible unless there's a clear AML chain established that can reasonably defend against a blanket sanction.

In the exact same way, the SEC will go after any cryptocurrency "securities" that they want to, as soon as those securities blow up. Filecoin had an ICO just like a lot of other securities, but seemingly because it hasn't blown up, the SEC hasn't come knocking yet. It's just an evidence collection game.

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> if you don't have an AML system that works, and your system is used for anything the government can prove would've been stopped by AML and should have been stopped by AML, it is incompatible, in principle, with the US dollar

Yeah, and I think it's really interesting how widely accepted this stuff is. I mean, it's literally the financial version of global mass surveillance. Governments gotta know every single transaction that's ever happened because reasons, and if anything bad happens and it turns out someone's lack of total surveillance and record keeping of everyone they ever dealt with somehow helped it happen, well...

Sometimes it feels like people don't realize how tyrannical and dystopian that is. Like money laundering is some unbelievably evil crime that makes it okay for the government to surveil everything in hopes of stopping it.

Money laundering is evil. Sorry, this weird obsession people have with "Muh financial privacy" and "I'm just moving it around, that ain't a crime!" is the outlier here.

Should the government be handed every transaction on a silver platter every day? Probably not, but I don't think you'll find many people in the big wide world agreeing that financial activity should be forever unavailable to governments, courts or anything else, even under applicable warrant, which is what these services provide.

And why is this absolute privacy bad? Where to start? Criminals hiding ill-gotten gains is only a small part of it. We have the funding of rogue nation states and enabling of ransomware, which is roughly in the same ballpark, sure, but very harmful. Then we have straight-out tax evasion. We also have dictators and despots who plunder their countries and enrich themselves. Should their activities be private? Should we just allow them to siphon money off to other countries and live the high life while their population suffer? It happens all too often already, but in much of the west now we are catching this stuff and denying them those things because we can see some of what's gone on.

And what about our own democracy? Absolute financial privacy can allow wealthy interests to brazenly buy politicians, with guarantees of untraceability.

So no, I don't "realise" how tyrannical and dystopian that is, in fact to me it looks like it helps prevent a variety of forms of dystopia, in which the rich and the corrupt could even more easily and directly buy democracy out from under us.

The fact that you can't currently have a system which provides privacy until an authority (such as the court system) demand things be unlocked, well that seems like a problem for cryptocurrency users, not the law.

> Money laundering is evil.

Be careful that you do not become even worse in the attempt to fight it.

We are all engaged in a politico-technological arms race: government makes laws, people make technology that circumvents them. They must create ever more tyrannical rules in order to stop the latest technology. So what is your limit? How far will this loop continue until either criminals win or people are crushed under a totalitarian government?

> Should their activities be private? Should we just allow them to siphon money off to other countries and live the high life while their population suffer?

Should governments warrantlessly surveil everyone to prevent such things? Corrupt people getting rich off of taxpayer money sucks but I wouldn't trade away my privacy in order to prevent it.

> The fact that you can't currently have a system which provides privacy until an authority (such as the court system) demand things be unlocked

Yes, because governments, especially the USA, are notorious for respecting the rights of their own citizens not to be surveilled without reason. Right?

> So what is your limit? How far will this loop continue until either criminals win or people are crushed under a totalitarian government?

Not only is this not my 'limit', I view the incident we are talking about as a very positive move. Traditional finance laws should be enforced in the cryptocurrency space. "But blockchain" is not a good answer to why you shouldn't have to.

They aren't even creating any more rules here! They're literally applying the exact same rules that are already applied to everyone else in every other avenue. If cryptocurrency systems can't play by those rules, then that's a cryptocurrency ecosystem problem.

> Should governments warrantlessly surveil everyone to prevent such things?

You'll note I already explicitly said no to that in the comment you're replying to. You then go on to talk about "muh privacy" in absolute terms as well. This black/white, all/nothing view of the world is part of the problem. I don't think government should be surveilling everyone all the time by default, nor do I think that we should be enabling completely untraceable large-scale money-laundering facilities that can't even be examined under appropriate warrants. There is an entire spectrum of shades of grey between those two. It may even be multi-dimensional, and the entire 'mainstream' financial system lives in there. Presenting it as only one or the other is fallacious. If blockchain systems can't support any sort of middle ground then again, that's a cryptocurrency ecosystem problem.

> Yes, because governments...

You're making the case for democratic reform here, which I am all for. Democratic reform and democratic oversight. Sounds good.

> completely untraceable large-scale money-laundering facilities that can't even be examined under appropriate warrants

It's just private digital currency. If they suspect someone is laundering money, they should have to seek real warrants and then knock on actual doors. They shouldn't be able to just put the burden on corporations and citizens to do the mass surveillance for them so they can prove to the government that they're not criminals up to no good with their hard earned money.

Privacy is a reasonable expectation and these currencies are the tool to achieve it. They aren't to blame when some criminal uses them to do whatever. Are you against citizens having access to cryptography the state can't break as well? Because that's the standard by which these technologies are judged.

> You're making the case for democratic reform here, which I am all for. Democratic reform and democratic oversight. Sounds good.

Sounds great but until such a thing happens there is no reason to trust these governments.

The corrupt buying democracy out from under us? It's already happening, it's not even hidden and money laundering laws don't stop anything. We have these billion dollar corporations lobbying the US government, essentially buying laws that favor them. Copyright industry robbed the people of their public domain rights and these traditional laws didn't do a thing to stop it.

> They shouldn't be able to just put the burden on corporations and citizens

But 'they' already do put this compliance burden on citizens and businesses in all other avenues of finance. There is nothing new here, and as I said before "but Blockchain" is not a good enough reason to exempt sections of the industry from this.

> Privacy is a reasonable expectation

Sure, to some extent, but absolute, mathematical privacy even in the face of court orders? Really not so much. Yeah, we can agree that 'they' should have to get warrants for a lot of this stuff, but services like Tornado make it impossible to execute said warrants, they do a complete end run around legal, legit access to this information. Which is why we as a society seek to stop those sorts of services from running in the first place. Like I've been at pains to say in my other comments here: there is an absolute fuck-ton of middle ground between complete financial transparency and complete, mathematical financial opacity.

> Are you against citizens having access to cryptography the state can't break as well?

No, because fundamentally speech and finance are not equivalent.

The fact that you can use cryptography to permanently obscure financial transactions doesn't mean that we should just allow that to happen in the name of privacy, privacy of a degree which we explicitly don't afford to actors outside of the cryptocurrency space. Encrypted comms - great, services using cryptography to facilitate money-laundering, not so much. There is no inconsistency here. Lots of finance houses use all sorts of fancy crypto to keep their stuff secure, but they also keep compliance records so that if the courts do come knocking with the appropriate legal rights to data, they can deliver it. I know this goes massively against the ruling ethos in cryptocurrency circles, and a lot of cipherpunk type mentality, and that's really why we're seeing this stuff escalate, because as more and more people try to take ETH/BTC/whatever mainstream, the more it buts up against the existing system and the more the regulators take notice.

> The corrupt buying democracy out from under us? It's already happening, it's not even hidden and money laundering laws don't stop anything.

It is happening, but I disagree, money laundering and oversight laws catch a bunch of stuff, there have been multiple stories of (for instance) Dictators' wives being caught buying expensive property with dirty cash in Western nations, then being denied access to their accounts.

I agree, lobbying in the US needs serious attention. I don't think Tornado Cash is going to fix that, in fact widespread use of such services is almost guaranteed to make it much, much worse, especially in countries where we already restrict lobbying much more!

You can have all the privacy you want when you aren't acting in public with millions of people.

Something of an aside, but your comment here seems largely well-written, reasonable and a positive contribution to the community, but the usage of "muh privacy" really, really harms it. It makes an otherwise sound argument come off as childish and rude and is derogatory towards people who have slightly different priorities or views.

I guess I'm just tired of this argument, and how much the internet is full of polarised, false-dichotomised thinking, and has been for decades.

I'm not going to claim to have never argued in such a manner myself, or that my phrasing is particularly helpful. I also just need to take some time off work.

Is money laundering evil?

It depends on your morality.

Let's assume we're talking about tax evasion: the government is telling its citizens "Give me 50% of your profit or I'll put you in jail". This is violence and it's immoral. Escaping this violence is not a crime in my book.

Let's assume we're talking about trafficking illicit substances: the government is telling its citizens "Don't trade these items with each other or I'll put you in jail". This is violence and it's immoral. Escaping this violence is not a crime in my book.

Let's assume we're talking about people corrupting politicians: this is immoral but, on top of often going unpunished in the current system - it's unfixable. The only way to reduce this occurrence is by reducing (or entirely eliminating) the power centralised in the hands of politicians so that no-one will want to corrupt them. No need to monitor all financial transactions.

Let's assume we're talking about people killing other people: this is obviously immoral. Still, pick any "legal" war initiated by government and you'll find more dead innocents than what crime cause. Are we preventing money transactions to maintain our army? And then, is tracking this ill gotten gains an efficient way of improving the situation? I think it will be largely ineffective, it's much easier to foster a society where we have private protection services that work, instead of an inefficient police force collecting a paycheck from the taxpayers regardless of performance.

When you wield an hammer everything looks like a nail - but monitoring citizens like in 1984 is a inefficient solution meant to fix symptoms of bigger problems: namely our centralisation and dependance on a central government, their monopoly to violence and their obsession with regulating our lives, certainly "for our own good" and not to exercise and maintain their power.

All taxation is theft and what's more that makes it violence! I am the ultimate authority in my life, you can't tell me what to do! Governments suck because war is bad! I don't need regulations at all!

This is so full of fallacious assumptions and facile ancap thinking it's hilarious.

> Let's assume we're talking about tax evasion: the government is telling its citizens "Give me 50% of your profit or I'll put you in jail". This is violence and it's immoral.

I could just as well say "hoarding resources and not sharing them with the rest of society, just because you're able to, deprives others. This is violence and immoral." That's not necessarily my personal view, but do you see how morals can differ?

> Escaping this violence is not a crime in my book.

The key concept there being that it's "your" book. Laws are not objective and absolute, they're the result of the society they exist in, preferably (in my and most people's opinion) derived from democratic participation. Your book is not aligned with the laws of the country you live in. You can lobby to change that, but it does not mean that the laws are invalid or shouldn't apply.

The real world is filled with forces that want to crush you. The government creates an alternative reality game with law and order to isolate you from the harshness of reality.

If you complain about the only source of violence to you being the government, then congratulations the system is working for you. Some poor, especially black people think the opposite, that their government has abandoned them and left them exposed to both violence by fellow people and authorities who abuse their powers. What do they want? To be treated like their rich or white fellow citizens.

The government is one of those forces that want to crush you. Given that situation, I'd rather choose my particular foes than have one thrust upon me.

Money laundering is not evil. Anti money-laundering laws are evil.

There shouldn’t even be a need to launder money, no matter how one came in possession of it. Otherwise the burden of proof is inversed, where I have to prove to basically the preponderence of evidence standard to virtually all financial institutions that my money is not proceeds of some illegal activity.

Anti-money laundering laws just add more crimes on top of the illegal activity in the first place, presumably because of lazy job by the politicians caused by lazy investigators, because evidently it’s easier to prove the money laundering fact, than the underlying criminal activity. Which is the same reason why we have civil asset fortfeiture, which, quite literally, is nothing more than legalized theft.

> Then we have straight-out tax evasion.

Kudos to whoever manages to get away with straight up tax evasion. Taxation is inherently violent.

> And what about our own democracy? Absolute financial privacy can allow wealthy interests to brazenly buy politicians, with guarantees of untraceability.

In that case, the politicians have too much power.

Money is power, if you want to abolish the need for AML you will first need to make money less important and powerful.

That can’t (and arguably shouldn’t) be done.

I'm an illustrator. I want to make some pin-up art and sell it. However A. I think it's kind of embarrassing B. It could absolutely never be associated with my real name because it would torpedo my official career due to the current social climate.

The only way I could think of to really keep identity separation in a way that doesn't leave me beholden to a third party was to use some sort of crypto mixer. I don't trust institutions not to leak data that could be used to establish an identity link.

Do you think I'm evil?

I think you're likely overly paranoid, not evil. And I also think you probably ought to consider what else it is you're giving cover to by using a mixer, and not be surprised if the services you use get shut down with great prejudice.

>overly paranoid

I disagree. My livelihood depends on said identity separation. I agree such a leak is very unlikely, but it could be life-changingly detrimental if it happened. Or it could raise public opinion of me, who knows? I believe in risk management.

>consider what else it is you're giving cover to

I can see it that way. But I mostly transact in the US dollar, and voluntarily live in the US. Do I therefore support the US goodbye-kiss dronestrike on an innocent Afghani family?

IMO participating in a system of commerce does not necessarily confer the responsibilities of some participants onto others.

Not evil, but a coward, by letting your community remain stigmatized by refusing to stand up for what you believe in.

Question: how do you propose preventing other people from making copies of this art and selling it, without revealing your identity?

If you want to use copyright to protect your work, and end up suing, remaining pseudonymous will be difficult.

Courts will only sometimes allow an anonymous/pseudonymous complaint. Even when they do allow it, they may require that defendant be given access to your real name, even if it remains sealed from the public. Even if you are somehow successfully in remaining anonymous to the court, the defendant, and the public, you are only going to be able to do that via being represented by an attorney, who will most likely need to know your name, and the attorney’s identity will be public.

(The attorney would likely need to know your real name for ethics reasons, like making sure they are not representing a defendant you are suing in some non-private lawsuit. )

But given you don’t trust institutions to not leak identity, I suppose you cannot trust the attorney to either.

I won't bother with copyright. It's already mostly impossible anyway. If you make illustrations these days you can't prevent their distribution. Only situation worth bothering with copyright is if a major company/high paid illustrator lifts your work, and even then it's tenuous (look up "sail lin call of duty floof").

The way to make money as an independent is to make distinct/unique content people can immediately recognize as yours and open up donations (patreon). You can also time gate access to new work to some extent. If there's a better model, I'm unaware.

Copyright disproportionately protects large firms, not individual creators. There are exceptions, of course, but they are far from the norm. Hell, most big companies I've worked at have clauses that say I assign them all rights to all work I make while employed with them. Those are fun to deal with.

Short of massive success, I would be better off as an illustrator if copyright were entirely dismantled.

I trust attorneys on a case-by-case basis. So far the ones financially aligned with me have been swell.

No it is not, it is a human right.

> Money laundering is evil.

I don’t even know how to respond to this sort of caveman “it evil” thinking but..

> funding of rogue nation states

Rogue according to you?

> straight-out tax evasion

Avoiding the violent theft of your hard earned money is now evil?

> We also have dictators and despots who plunder their countries and enrich themselves. Should their activities be private?

Their money should be. Store of value should be.

> Should we just allow them to siphon money off to other countries and live the high life while their population suffer?

This is a question that has very little to do with whether money is private. Inequality is not impossible to detect even if money is private.

> And what about our own democracy? Absolute financial privacy can allow wealthy interests to brazenly buy politicians, with guarantees of untraceability.

They don’t even need privacy. They do it in broad daylight.

> Tornado Cash was /never/ okay, but the government waited patiently for the evidence and acted when it had it.

The government didn't even sanction all the smart contracts. BSC chain had more activity than the Ethereum contract, but they didn't seem to know about it. Furthermore, Tornado had compliance tools built in that allows users to prove where their funds came from to make themselves compliant with KYC rules.

The whole thing seems really hamfisted and poorly thought out. The US Secretary of State even tweeted incorrectly that North Korea built Tornado, then had to delete the tweet! https://www.coindesk.com/policy/2022/08/08/us-secretary-of-s...

I don't think the government really thought it through, and future lawsuits will hopefully result in Tornado being un-sanctioned and privacy affirmed as a constitutional right, as it did in the 90s when source code was declared free speech after a long battle https://en.wikipedia.org/wiki/Bernstein_v._United_States

Tornado Cash was sanctioned over e.g. Monero, ZCash or Secret Network that fulfill the same shieled transaction purpose but have existed longer. The reason for this was that Tornado Cash attracted North Korean Lazarus group to use it. The reason why Lazarus used it was that it was non-custodial (no risk of criminals stealing other criminals) and ETH had better exit liquidity over XMR and ZCash that are not often listed on the shady exchanges. When national security interest card is played, laws and even the constitution do not seem to weight so much anymore in the US.

If Tornado Cash had been modified in a way that it could not allow easily to deposit and withdraw large amounts by limiting flow/liquidity it would have been less attractive for Lazarus and other hack group purposes. For example, Harmony One hack $100M was pushed through Tornado in one day.

Tornado Cash has a compliance tool that could allow centralised exchanges and fiat off ramps to trace transcations through Tornado. However, in practice some US political allies, like those in Dubai, run shady OTC desks that do not do it, making Tornado very practical tool for hack laundering.

The best outcome for the situation would be

- Tornado Cash code is ”unsanctioned” or deemed free speech

- Someone builds a service for shielded transactions that has features to discourage its use for nation state scale money laundering

Ransomware groups have been using Monero and Bitcoin as well, it isn't like Tornado was a unique player. I seriously doubt that with Tornado banned suddenly money laundering and hacking will stop. If anything it will make regulators' life harder as it will all now disperse into other tools rather being centralized into a single place, and hardcore cypherpunks will be more motivated to build even better tools.

The argument you're likely to get is something along the lines of "just because the rules don't stop everybody, that's not an argument not to have the rules."

But you're right. In this case it won't do much. But it justifies the salary of many bureaucrats. They can play whack-a-mole and no one will think too hard about it, because hey it's hardened criminals they're going after right? The 'moles' will simply scatter elsewhere and those arguing to whack the moles will always have the moral upperhand, so the salaries of the mole whackers will always be secure.

It is more like a random audit than whack-a-mole. It will scare off a huge amount of small time players with lives they don't want ruined that had thought they could use it to tax dodge. Maybe they still can, but now they have a chance of random audit hanging over their head.

Earlier in May Bitcoin mixer blender.io was sanctioned for the same reason. While hacking and money laundering does not stop, small steps can be made to limit the exit liquidity for ransomware/scam/hack/phishing even without drastic KYC/AML/FATF travel rule measurement.

Because the alternative is that the regulators attempt compliance theater and you need to scan your passport every time you do a transaction and then your identity information is being stolen left and right.

Monero wasn’t sanctioned because it is not positioned as a mixer like Tornado Cash is.

> The whole thing seems really hamfisted and poorly thought out. The US Secretary of State even tweeted incorrectly that North Korea built Tornado, then had to delete the tweet!

Somewhat tangentially, if it is an official government account, it's crazy to me that they can get away with deleting tweets (and subsequent interactions on those tweets) without an official record.

I can see valid reasons to delete a inaccurate and misleading statement, but this requires substitution with a link to the archived message and a public statutory countdown to a seven days grace period before any misleading public servant either publishes a formal explanation for their errant communication or is automatically forfeit the mechanism of their office. Possibly the forfeit could be incrementally enforced for graded infractions, but given the gaming culture in every reach of human responsibility I think it should be a simple and clear cut off.

Source code may be free speech, but operating as a money transmitter is not. It is a regulated industry.

This feels like another version of the 90s cryptowars - a lot of the arguments are similar. Encryption enabled regular people to have private communications, but at the cost of bad people also having private communications.

Tornado cash allows regular people to have private blockchain transactions on ethereum (where with blockchain everything is extremely public otherwise), but at the cost that bad people can also have privacy.

Sanctioning tornado addresses is similar to the export munitions thing with crypto and keys, particularly weird since tornado seemed to go out of their way to build in compliance tooling? IANAL, but there's some strong precedence for speech protections with regard to code.

Allows regular people to wash the little pocket money they might have, and try to not pay taxes on them.

A lot of people in Greece simply didn't pay taxes because they could easily get away with it. It might be okay if a few people do it, but if everyone does it, it destabilises the country and the damage will go beyond politicians losing their seats.

> A lot of people in Greece simply didn't pay taxes because they could easily get away with it. It might be okay if a few people do it, but if everyone does it, it destabilises the country and the damage will go beyond politicians losing their seats.

No. It's deeply rooted in Greek culture to the point that VAT is basically an optional tax for most entrepreneurs. Virtually nobody at all pays VAT on cash sales in Greece, and there's virtually no enforcement on it, so the only risk of getting caught is if you've pissed off someone with connections.

So everyone does it, and Greece is reasonably stable.

I have no interest in helping the people trying to evade taxes (at least they’re not the group I care about), I care about the people that want private transactions and pay their taxes.

There are good reasons to want privacy around financial transactions that are not tax evasion or money laundering. This is especially true in the blockchain world where everything is extremely public.

Just like there are good reasons to want private communication even if you're not committing crimes.

It's interesting how Tornado Cash was sanctioned and not Monero. Perhaps there was more evidence of Tornado Cash being linked to criminal activity, which seems counterintuitive because of how much more popular Monero is. Is it perhaps easier to trace transactions on Tornado Cash?

TC just has a lot more liquidity. I mean had...

My guess is that it’s both: the Dutch story specifically mentioned direct personal profit, which I’d bet GitHub knew about, and if the story about North Korea using it to launder the proceeds from high-profile hacks are true that’d certainly explain the specificity as not picking one option out of many but rather the one which came up in the process of a big investigation. Half a billion dollars is enough to attract all kinds of attention – I’m sure Monero would get a similar reaction if the Lazarus group was traced to that network, too.

What this suggests to me is that these services are about to mostly go underground as primarily criminal organizations’ internal services. It’s like running a Tor exit node but worse due to the liquidity requirements: you have to be an incredibly privacy-minded activity with a huge sense of security to link yourself financially to a service which you know will inevitably be used by one of these groups.

They tried to sanction a Monero wallet once and ended up sanctioning a transaction hash.

https://www.treasury.gov/ofac/downloads/sdnlist.txt

> Digital Currency Address - XMR 5be5543ff73456ab9f2d207887e2af87322c651ea1a873c5b25b7ffae456c320;

https://localmonero.co/blocks/search/5be5543ff73456ab9f2d207...

It's unclear how resilient Monero will prove to be over the long term but it's certainly looking stronger than centralized coin mixing services.

> Is it perhaps easier to trace transactions on Tornado Cash?

An exchange can detect if some Ethereum have been through a mixer very easily. Monero on the other hand has been de-listed or banned from exchanges, making it harder for criminals, scammers, etc to cash out or swapping to fiat.

As soon as the Tornado contract address has been blacklisted and put on the sanctions list, any wallet address interacting with the contract or Ethereum sent from or to it will flag up and get blacklisted by other centralized entities that have AML/KYC checks like Circle USDC, many exchanges, etc.

I'm told that detecting if a transaction will involve the tornado contract is similar to the halting problem, because someone can write a proxy contract that behaves one way while being checked and another way when being executed. They can catch the easy cases, but it is impossible to detect all prior.

This is like selling a sufficiently hardened hardware wallet instead of doing a transaction, doable in theory but impractical.

no, it's all in software because you can create any smart contract and it can call any other. There is a difference in knowing after the transaction has finalized and predicting beforehand, which is when you would want to block the transaction.

https://www.youtube.com/watch?v=macM_MtS_w4

> Monero on the other hand has been de-listed or banned from exchanges

That's pretty strange since the biggest centralized exchanges do list Monero: Binance, Kraken, Bitfinex.

Why did you leave out the fact that Kraken [0] delisted it in the UK, Bittrex also delisting it [1] and many [2] other exchanges [3] also delisting it? Even Litecoin has been delisted [4] due to a privacy feature upgrade and even Binance [5] is not supporting the Litecoin privacy extensions upgrade.

There is a reason why FTX, Coinbase and Binance.US never listed it in the first place and this reinforces my point that regulators do not want privacy coins to survive.

[0] https://cointelegraph.com/news/kraken-to-delist-monero-for-u...

[1] https://www.nasdaq.com/articles/bittrex-to-delist-privacy-co...

[2] https://cointelegraph.com/news/bitbay-crypto-exchange-to-del...

[3] https://www.cpomagazine.com/data-privacy/south-koreas-new-cr...

[4] https://cointelegraph.com/news/major-south-korean-crypto-exc...

[5] https://www.binance.com/en/support/announcement/61d4510b1ada...

> Why did you leave out the fact

Well, I didn't know. The exchanges listed Monero for me when I accessed them, so I assumed it was the same for everyone everywhere.

> In the exact same way, the SEC will go after any cryptocurrency "securities" that they want to, as soon as those securities blow up. Filecoin had an ICO just like a lot of other securities, but seemingly because it hasn't blown up, the SEC hasn't come knocking yet. It's just an evidence collection game.

When did XRP blow up? I don't think the SEC is waiting for a rug pull or system failure to sue.

> The US dollar is the world reserve currency, and the SDN list is a death sentence for any project or system if that system has outputs to US dollars anywhere in the chain.

If that's so, why not to after the entities that actually convert X into USD? Tornado only allowed you to trade ETH for Tornado tokens, and vice-versa, no USD involved.

I’m not sure if you’re being obtuse, but exchanges are already subject to AML/KYC, and are constantly both enforcing as much as they can, or being fined by governments for failing to do so. Tornado was the exception until now.

This is true of a lot of tech start ups - doing something that is technically not allowed, but the key difference is that to do it successfully you need to get to a scale where you can pivot to something is allowed. For Uber that was slowly changing to adhere to all the regulations around employment law and taxi companies in each jurisdiction. It's questionable that after that pivot they're a great business.

In Tornado Cash I guess the equivalent would "You can hide the flow of your crypto from the public but we're still going to comply with the government AML & KYC."

> All electronic cash transfer systems should be assumed to be incompatible unless there's a clear AML chain established that can reasonably defend against a blanket sanction.

Nonsense absolutism.

Is that why Stripe, Moneygram, Circle, etc invested in Stellar, and they are still using ISO 20020 compliant cryptocurrencies like those ones after waiting for regulatory clarity in March 2022?

If you're referring to ISO20022 that's a messaging standard primarily used between financial institutions, not an AML compliance thing. It's got nothing to do with regulation at all, let alone AML regulations. That's kind of like saying companies that run SMTP servers must therefore be in compliance with GDPR or email archiving laws.

As for why Moneygram invested in Stellar who knows? CDPQ invested in Celsius. Better to ask forgiveness than permission, but as the parent said, lack of enforcement does not mean lack of regulation - and it has no bearing on future enforcement.

Financial services companies take AML compliance seriously because if they don't their liability is practically unbounded and I have to say Moneygram looks nothing like Tornado.

> As for why Moneygram invested in Stellar who knows?

Moneygram knows? Maybe try asking them and others on why they did?

I'm very sure that Moneygram had a wide range choices of other projects to build their product but somehow landed with one serious crypto project that happens to be compatible with the ISO 20022 messaging standard which the current system is using and the Stellar Network has stood the test of time since their launch.

Didn't stop them from actually launching the product with the Stellar Network and for Stripe investing in the project and waiting for regulatory clarity in March 2022 to announce their cryptocurrency services did it?

> Moneygram knows? Maybe try asking them and others on why they did?

Why would I ask them? They would never admit to it being a 'shoot first ask question later' play. They would never admit to it being FOMO. They would never admit to it being something they were afraid they'd get left behind on and once they realized it wasn't relevant to their business, sunk cost fallacy took over. They'd never admit to anything that made them look bad. You wouldn't ask Moneygram for the same reason you don't take a criminal's word on not doing crime - there's only downside to telling the truth. I'm not saying it's one of these reasons - but rather if it was they'd never say.

Again, ISO 20022 is completely irrelevant to this conversation. I've genuinely no idea how this became a talking point.

Again, this has nothing to do with AML compliance which I'm confident each of those companies do - and we know full well that Tornado did not.

Again, there's no reason to think that there won't be any future regulatory action simply because there has not yet been any, and I personally doubt any amount of appealing to authority will help.

> Why would I ask them? They would never admit to it being a 'shoot first ask question later' play. They would never admit to it being FOMO. They would never admit to it being something they were afraid they'd get left behind on and once they realized it wasn't relevant to their business, sunk cost fallacy took over. They'd never admit to anything that made them look bad.

Is this what you say when someone brings up a refutation towards an absolutist statement about "AML chains" and standards compliance with the current system? Why not confirm your suspicions by asking them directly [0] rather than making more excuses, unless as I always expect from many absolutist critics of crypto especially on this site, that they are all talk and no action; which that is so easy, anyone can do that.

> Again, ISO 20022 is completely irrelevant to this conversation. I've genuinely no idea how this became a talking point.

The reality is and with the many years of these cryptocurrency technologies and projects existing is that only a few of them will survive and as I have mentioned already a few will stand the test of time to be serious enough for companies like Stripe and Moneygram to choose and use projects like Stellar, and those that are compliant with the current system; be it the ISO 20020 messaging standard and have AML compliance, etc will be around for a very long time. So in fact, it is totally relevant to this discussion.

> Again, this has nothing to do with AML compliance which I'm confident each of those companies do - and we know full well that Tornado did not.

Non-compliant projects that enable complete or total obfuscation like Tornado Cash, Monero, etc or any other projects that angers the regulators won't survive and will be targeted and made difficult to use. That also explains why MoneyGram ruled out the privacy coins and chose Stellar for their product. No need to ask them about that.

> Again, there's no reason to think that there won't be any future regulatory action simply because there has not yet been any and I personally doubt any amount of appealing to authority will help.

Now who exactly said that there won't be any 'future regulatory action'?

Given that the SEC is continuously cracking down and enforcing their regulations on many crypto projects this year and with other places like the UK, EU countries following up with their own rules, its clear that the privacy coins, tools, etc are the first to be clamped down since they are already incompatible with KYC, AML checks; hence the importance of waiting for regulatory clarity by the authorities which is exactly what I said in the first place had you read my comment.

Sounds like you are ranting in denial. It's not too late to stop them and get them to admit your suspicions of them in 'FOMO', or 'being something they were afraid they'd get left behind on' or 'being attached to sunk cost fallacy' yourself then: [0] plenty of time.

[0] https://www.crowdcast.io/e/techstars-payments-3/register

See: Even with plenty of time, you (arcticbull) didn't attend the 'Ask me Anything' session to question them or attempt to stop them with your suspicions.

Like I said, just talk and no actions. Very common with extreme anti-crypto folks here.

You and others are making really good points, it’s a shame you’re downvoted into the grey.

Governments are by and for the citizens. Crypto enthusiasts want to avoid taxes while making profits, because let’s be honest, that’s what Tornado is really about. At best, 1% of traffic is for legitimate services, because you can’t really buy much with crypto except other crypto.

What blockchains enable is yet another class of money laundering. It doesn’t help anyone except the crypto minority, but enables the other bad elements to have another system to use for their corrupt activities. Libertarians in a corrupt classist capitalist society cannot “save” themselves by hiding behind a blockchain - it won’t solve societal ills.

ok - except it is a system-of-systems, not one system. The perfection of one and destruction of all others is specifically designed-OUT for lots of important reasons (see HISTORY). Perfect tax enforcement is not even possible, by their own defined rules. There is no perfect system and real evolution needs to deal with that -- all manner of despots and arch-bureaucrats be dammed.

That's just a complaint, not a realistic proposal for change. The reality is that in the US, there is a broad and stable political consensus in favor of ever stricter AML enforcement. This is perceived as reducing tax evasion, sanctions evasion, terrorism, and organized crime. It may not be 100% effective but it obviously has some effect. Only a small fraction of voters and campaign donors are negatively impacted so there is little political resistance.

The proposal for change is for FinCEN and others to engage in formal rulemaking so compliance can be achieved.

The point is the rules already exist and crypto was just deluding themselves into thinking it didn't apply. There is no reason for proposals or other formal rule-making because that step already happened.

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